Sunday, September 28, 2008

INTEREST RATE HOLIDAY


I propose that Congress enact an interest rate holiday for mortgages and credit cards. With interest rates at ZERO, all payments would go to paying down debt rather than the majority of payments going to interest. This would still give banks money back but they would not make a profit for a specified time-say, one year. After that, assess the impact and go from there. Maybe raise the rates slowly until some sense of normality occurs. This put money in the hands of the consumer, allows for debt reduction and can bolster the economy. Obviously, this would be for existing as of a set time, any charges after that time would be subject to interest rates. HOWEVER, there should be a cap on interest rates. How can you pay down a credit card when you are paying 18-24% interest? Time to put a cap on usury and give the break to the consumer and not the bank.

Thomas Jefferson's letter to Treasury Secretary Albert Gallatin in 1802:

“I believe that banking institutions are more dangerous to our liberties than standing armies. If the American people ever allow private banks to control the issue of their currency, first by inflation, then by deflation, the banks and corporations that will grow up around [the banks] will deprive the people of all property until their children wake-up homeless on the continent their fathers conquered. The issuing power should be taken from the banks and restored to the people, to whom it properly belongs.”

2 comments:

Marvin D. Wilson said...

Wow. Prophetic statement indeed by one of our founding fathers. I believe it was he that also said in order to keep government honest and a true servant of the people, there needed to be a revolution every twenty years. We're a little overdue, dontcha think?

zhadi said...

What a great idea re: the holiday on interest rates! And yeah, Marvin, I was just talking to someone today about the overdue revolution...